Markets
$2.2 Billion Crypto Options Expire as Macroeconomic Data Looms
The crypto market is bracing for possible temporary turbulence, with over $2.2 billion worth of Bitcoin (BTC) and Ethereum (ETH) options set to expire today.
Can exhalation cause greater volatility in the market, and will this affect the price of the two major cryptocurrencies?
Examining the impending options expiration for Bitcoin and Ethereum
Approximately $1.24 billion worth of Bitcoin options contracts and $984 million worth of Ethereum options contracts are set to expire. Depending on how traders react to the event, the expiration of these options contracts could trigger a new wave of liquidations or buying pressure.
According to Deribit data, 17,609 Bitcoin contracts are set to expire, with a put-to-call ratio of 0.67. This ratio suggests a predominance of purchase options (calls) over put options.
Learn more: An Introduction to Crypto Options Trading
Expired Bitcoin Options. Source: Deribute
Meanwhile, Bitcoin’s max issue is around $70,000. The maximum problem is the price level at which the asset will cause financial losses for the greatest number of holders.
Analysts at crypto options trading tool provider Greeks.Live suggested a positive outlook for Bitcoin and Ethereum prices despite the upcoming options expiration. They explained that the crypto market, particularly Bitcoin, showed signs of strength following the announcement of interest rate reductions by the Bank of Canada (BOC) and the European Central Bank (ECB).
“US non-farm payrolls and the unemployment rate have also become more interesting, with The Fed reduces its expectations now at the center of macro trading. Short term [implied volatility] IV is now up sharply, with the weekly figure [at-the-money] ATM IV returns above 50% but still below 50% at the end of the week, just as traders are betting on [today’s] data exceeds expectations, with slightly stronger bullish forces,” they note.
On the Ethereum market, 259,641 contracts are expected to expire. The put-to-call ratio stands at 0.64. Ethereum’s max problem is $3,650.
Learn more: 9 Best Crypto Options Trading Platforms
Although options expirations can cause temporary market disruptions, they are often followed by stabilization. Traders must remain vigilant, analyze technical indicators and Market Sentiment to effectively manage anticipated volatility.
At the end of the week, Bitcoin and Ethereum showed resilience. Bitcoin hit a two-month high of $71,713 before retreating slightly. On the other hand, Ethereum is trading at $3,805, after experiencing a slight decline.
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